Skechers USA (NYSE: SKX) reported Q4 EPS of $0.39, in-line with the analyst estimate of $0.39. Revenue for the quarter came in at $1.33 billion versus the consensus estimate of $1.25 billion.

Fourth Quarter Highlights

• Record quarterly sales of $1.33 billion, an increase of 23.1 percent
• Diluted earnings per share of $0.39, an increase of 25.8 percent
• International sales increased 31.2 percent, or 32.3 percent on a constant currency basis
• Domestic sales increased 13.0 percent, including an increase of 10.4 percent in domestic wholesale
• Comparable same store sales increased 9.9 percent, including increases of 10.3 percent domestically and 8.8 percent internationally
• International sales represented a record 59.3 percent of sales

“2019 was a remarkable year for Skechers as we achieved four quarters of record sales, culminating in annual sales of over $5.2 billion—a significant milestone,” stated Robert Greenberg, chief executive officer of Skechers. “Our mission, as always, is to deliver style, comfort and innovation to the world. Our continued growth along with the 27 product and brand awards we received in 2019 are evidence that we accomplished our goal. 2019 was also the year we saw the resurgence of chunky sneakers—and as an originator in this category, we became a go-to source around the world. We also continued to grow our men’s business, introduced the next generations of our walk, run and golf shoes, and expanded the popular BOBS from Skechers line, helping save the lives of over 345,000 shelter pets in the United States in 2019 alone. We drove recognition of our brand with comprehensive campaigns that included football greats Tony Romo and Howie Long for men, animated commercials for kids, music video style fashion street commercials, and marketing support that highlighted comfort and innovative features of our collections. Our efforts in 2019 resulted in Skechers receiving two 2019 Plus Awards: Company of the Year and Children’s Excellence in Design from industry trade publication Footwear Plus.”

Mr. Greenberg continued: “We are deeply concerned by the health crisis in China, and for the well-being of our employees, partners, vendors and consumers in the region. We continue to monitor this situation and its potential disruption to our global business. The Skechers brand is strong in China, and we remain confident in our long-term prospects in the country.”

“The fourth quarter represented a new annual sales record and the second highest sales quarter in our history, both significant achievements for our brand,” began David Weinberg, chief operating officer of Skechers. “The growth of 23.1 percent in the fourth quarter was due to increases of 31.2 percent in our international sales and 13.0 percent in our domestic sales, with every region growing by double digits and international now representing 59.3 percent of our total business for the quarter. With comparable same store increases of 9.9 percent, including 10.3 percent in the domestic market, our direct-to-consumer channel continues to be a barometer for the strength of our brand. In the quarter, we opened a net 21 wholly owned Skechers stores, and 219 third-party stores, bringing our total Skechers store count to 3,547 worldwide. We have the infrastructure and inventory in place to meet the near-term demand for our brand, and we will continue to invest in our global operations.”

“Skechers record setting fourth quarter and full year 2019 results reflect the strength of our brand, product offerings and global execution capabilities,” said John Vandemore, chief financial officer of Skechers. “We continue to make investments globally to build on those strengths and to support our strategy to expand internationally and to deepen our direct to consumer relationships in store and online.”

GUIDANCE:

Skechers USA sees Q1 2020 EPS of $0.70-$0.75, versus the consensus of $0.78. Skechers USA sees Q1 2020 revenue of $1.4-1.425 billion, versus the consensus of $1.43 billion.

Outlook

For the first quarter of 2020, the Company believes it will achieve sales in the range of $1.400 billion to $1.425 billion, and diluted earnings per share of $0.70 to $0.75. This guidance reflects continued growth in each of the Company’s three reportable segments, and a full-year effective tax rate of 16 to 18 percent. It also incorporates an initial estimate of the impact to the Company of current events in China, including a significant number of temporary store closures and below average comparable store sales. This estimate could materially change if the situation in China worsens considerably and effects the Company’s business outside of China or its supply chain.

For earnings history and earnings-related data on Skechers USA (SKX) click here.